Big Data Could Help US Citizens Save Up to $450 Billion in Healthcare

Big Data is making its way into the healthcare sector as well with more pharmaceutical companies recording years of research and development data into medical databases, while payors and providers have digitized their patient records.

According to a McKinsey report, the US government and other public stakeholders have been opening their vast stores of healthcare knowledge, including data from clinical trials and information on patients covered under public insurance programs. Recent technical advances have made it easier to collect and analyse information from multiple sources—a major benefit in healthcare, since data for a single patient may come from various payors, hospitals, laboratories, and physician offices.

Fiscal concerns are driving the demand for big-data applications. Healthcare expenses in the United States now represent 17.6 percent of GDP—nearly $600 billion more than the expected benchmark for a nation it’s size and wealth. To discourage overutilization, many payors have shifted from fee-for-service compensation, which rewards physicians for treatment volume, to risk-sharing arrangements that prioritize outcomes.Under the new schemes, when treatments deliver the desired results, provider compensation may be less than before. Payors are also entering similar agreements with pharmaceutical companies and basing reimbursement on a drug’s ability to improve patient health. In this new environment, health-care stakeholders have greater incentives to compile and exchange information, it reported.

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